Major Leadership Shortage in Nonprofit World Expected in Next Two Decades

By Holly Hall

Nearly three-fourths of all nonprofit executives will reach retirement age over the next two decades, and charities will be hard pressed to replace them, according to a new survey.

The survey of 2,200 executive directors, commissioned by the Annie E. Casey Foundation, in Baltimore, found that 73 percent of the people who now lead charities are members of the baby-boom generation — those born from 1946 to 1964. Twenty-three percent of the nonprofit leaders said they would leave their jobs before 2007, and another 42 percent said they expected to leave their positions by 2009.

The high number of departures planned for the next few years is a sharp contrast to the recent past, the survey found. From 1994 to 2004, 75 percent of the executive directors reported that their organizations had only one or two executive directors. Thirty-four percent of the nonprofit leaders said they had been in their job for more than 10 years or were the founders of their organizations.

"There will be twice as many transitions in the next five years than there were in the previous five," said Paige Hull Teegarden, vice president for research at Managance Consulting, the Silver Spring, Md., company that conducted the research for the Casey Foundation.

Given the findings, as well as other demographic data, she predicted that the exodus of leaders from charities will occur in two waves: the first beginning to occur now and lasting until 2010 and the other ending in 2020 when most baby boomers will have reached 62.

The survey also asked chief executives about potential successors in their organizations. Thirty-six percent said that they had a deputy director or a person whom they consider to be second in command.

Demographic trends suggest that successors for departing baby boomers will be difficult for charities to find. While about 77 million Americans were born during the post-World War II boom, only 38 million are members of the generation that followed, known as Generation X.

Among the survey's other findings:

• Executives of the smallest groups — those with budgets of $500,000 or less — reported the highest amount of turnover over the past decade.
• Among the executives in the survey, 84 percent were white, 10 percent black, and 4 percent Hispanic or Latino. Forty-two percent of the executive directors said the people their groups served were mostly white.
• While 58 percent of the respondents were women, they tend to run smaller organizations and earn less money than their male counterparts. The average female executive in the survey managed a staff of 6 to 10, compared with men, who managed 21 to 50 employees. The average female executive earned $60,000 to $69,000, compared with $70,000 to $79,000 among males.

A free copy of the survey, "Change Ahead: Nonprofit Executive Leadership and Transitions Survey," is available on the Annie E. Casey Web site at http://www.aecf.org/publications/browse.php?filter=20.